Intellipharmaceutics International Inc. (Nasdaq:IPCI) (TSX:I) ("Intellipharmaceutics" or the "Company"), a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs, today announced that it has entered into a license and commercial supply agreement with Mallinckrodt LLC ("Mallinckrodt"), by which the Company has granted Mallinckrodt an exclusive license to market, sell and distribute in the United States the following extended release drug product candidates (the "licensed products") for which Intellipharmaceutics has abbreviated new drug applications ("ANDAs") filed with the U.S. Food and Drug Administration ("FDA"):

Collectively, the present annualized sales by third parties for the currently marketed versions of these products in the United States are approximately U.S. $2.5 billion.

Under the terms of the 10-year agreement, Intellipharmaceutics will receive a non-refundable upfront payment of US$3 million in October 2016. In addition, the agreement also provides for the Company to have a long-term profit sharing arrangement with respect to the licensed products. Intellipharmaceutics has agreed to manufacture and supply the licensed products exclusively for Mallinckrodt, and Mallinckrodt has agreed that Intellipharmaceutics will be its sole supplier of the licensed products marketed in the U.S.

The agreement contains customary terms and conditions for an agreement of this kind, and is subject to early termination in the event the Company does not obtain FDA approvals of the licensed products by specified dates, or pursuant to any one of several termination rights of each party.

Represents sales for all strengths for the 12 months ended August 2016 in the U.S., including sales of generics in TRx MBS Dollars, which represents the projected new and refilled prescriptions representing a standardized dollar metric based on manufacturer's published catalog or list prices to wholesalers, and does not represent actual transaction prices and does not include prompt pay or other discounts, rebates or reductions in price. Source: Symphony Health Solutions.

There can be no assurance as to when or if any of the licensed products will receive final FDA approval or that, if so approved, the licensed products will be successfully commercialized and produce significant revenues for the Company.

The CEO of Intellipharmaceutics, Dr. Isa Odidi, said, "We are very pleased to establish this long-term commercial partnership with Mallinckrodt, which follows last week's tentative approval for our generic Seroquel XR(R). Mallinckrodt is a respected pharmaceutical company with significant market presence in the U.S. This partnership provides further recognition of Intellipharmaceutics' technology platform and pipeline. We look forward to the commercialization of generic Seroquel XR(R) with Mallinckrodt following final approval."

"This agreement aligns well with our strategy of strengthening our Specialty Generics business and expanding our pipeline. If approved, these drugs will provide patients with alternative treatment options for central nervous system disorders," said Dr. Frank Scholz, Executive Vice President, Global Operations and President, Specialty Generics, Mallinckrodt Pharmaceuticals. "We look forward to working with Intellipharmaceutics to bring these products to market."

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